Wen Ho Lee Settles With Justice Dept., News Groups
June 2 (Bloomberg) -- Wen Ho Lee, the former Los Alamos nuclear weapons laboratory scientist once suspected of spying for China, will receive $1.65 million from the government and five media organizations to end a lawsuit that alleged his privacy was violated by news leaks.

The government agreed to pay $895,000 to resolve his suit, and the Associated Press, the New York Times, ABC News, Washington Post and Los Angeles Times will pay $750,000 in a separate settlement, according to Betsy Miller, an attorney with Jones Day in Washington who represented Lee.

Lee was fired from Los Alamos in New Mexico in March 1999, accused of spying and held in solitary confinement for nine months. He was never charged with espionage, and the government later dropped all but one charge of mishandling classified data. Lee pleaded guilty to the charge in 2000.

``We are hopeful that the agreement reached today will send the strong message that government officials and journalists must and should act responsibly,'' Lee said in a statement through his attorney. ``The rush to judgment that occurred in my case was prompted by a number of calculated, unlawful leaks by government officials who were seeking to preserve their credibility.''

Charles Miller, a spokesman for the Justice Department, declined to make an immediate comment.

Private Information

Lee had accused Justice and Energy Department officials and the Federal Bureau of Investigation of giving reporters private information about the government's investigation. He subpoenaed five reporters in August 2001, seeking testimony and documents related to his suit.

A judge later held the reporters -- Walter Pincus of the Post, James Risen of the New York Times, Bob Drogin of the Los Angeles Times, H. Josef Hebert of AP and Pierre Thomas of Cable News Network -- in contempt and imposed $500-a-day penalties. Thomas later joined ABC, which joined today's settlement.

``The fact that both parties -- the government and the journalists -- made substantial contributions demonstrates that they were aware they faced significant exposure if the case were to go to trial,'' Jones Day's Miller said.

In a joint statement, the five news organizations said they agreed to pay the money to Lee to ``protect our journalists from further sanctions'' and possible imprisonment.

Confidential Sources

``The journalism in this case -- which was not challenged in Lee's lawsuit -- reported on a matter of great public interest, and the public could not have been informed about the issues without the information that we were able to obtain only from confidential sources,'' the companies said.

Attorneys for Lee said no retractions are required under the terms of the settlement.

The issue of confidential sources has been prominent in recent months. The Supreme Court last year rejected appeals by two reporters who wouldn't disclose their sources to a prosecutor investigating the leak of a CIA operative's identity. Separately, the Justice Department is exploring possible criminal charges against journalists over stories based on classified information.

Lee said any contacts between U.S. officials and journalists about his case go to the core of his claims under the Privacy Act, a federal law that limits the government's ability to reveal personal information.

``A privilege cannot be premised on the `public's right to know' where, as here, the public expressly does not have a right to know,'' Lee argued in court papers.

Leaked Information

Lee said government officials leaked information about the investigation of him and then used the subsequent news stories to pressure him into confessing that he was a spy. He said one of the first stories, by Risen in the New York Times, wrongly suggested that Lee had failed a polygraph test.

The reporters argued that they are protected both by the Constitution's First Amendment and the ``common law'' principles developed by federal judges to govern what evidence may be used in court cases.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit disagreed last year, pointing to a 1972 Supreme Court ruling that refused to acknowledge a reporter's privilege of confidentiality.

The appeals court upheld contempt citations issued by a federal trial judge, though it overturned a contempt finding against another reporter, Jeff Gerth of the New York Times. After the three-judge panel ruled, a larger set of judges split 4-4 on whether to rehear the case.

Two appeals to the Supreme Court by the reporters were pending when the dispute was settled.

The case is Lee v. Department of Justice, 99-3380, U.S. District Court for District of Columbia.

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